Hopefully you have read between the lines of my writings over the last few weeks and felt the urgency of the situation. Markets all over the world are coming apart at the seams and “control” is rapidly being lost. I would like to mention, over the years there has been one “rule” never broken. Almost ALWAYS, whenever the president of the U.S. speaks, or whenever the Fed meets and issues a policy statement …or whenever the Chairman of the Fed speaks …”control” is at its greatest.
What have we seen this time? Janet Yellen testified yesterday and is doing so again today. The markets have come unglued. In particular, gold is now up $56 dollars for the largest gain since 2009 http://www.telegraph.co.uk/finance/personalfinance/investing/gold/12151847/Market-panic-pushes-gold-buying-to-highest-level-since-financial-crisis.html. Mrs. Yellen is now out of her league as many of her comments are not making sense and are actually contradictory of what she may have just said.
For example, her prepared remarks speak of tightening rates at future meetings. She was asked “is the Fed out of bullets” and she goes into the talk about negative rates. “Negative rates” are NOT ammunition. Negative rates are outright panic and desperation. I would also mention, the Fed has been at zero percent rates for 6-7 years, any lower rates (negative) are at this point the only plan B. But Mrs. Yellen said yesterday (and probably again today) the Fed does not know the “legality” of negative rates. How is this even possible? They have had all these years to research negative rates …yet to this day she doesn’t know if it is even legal? I would also add, Mrs. Yellen is so clueless she does not understand their rate hike was the spark that lit this thing up in the first place. Please don’t get me wrong, the fire was going to start somewhere, I just didn’t think the Fed would be the one striking the match!
Folks, let me put this into plain speak for you. If to this day the Fed does not know if negative rates (which has been a potential topic for well over two years) are legal, does this mean there is no plan “B”? Actually, does this mean there HAS BEEN no plan B all along??? Legal or not legal, were the Fed to move to negative rates, a “run” on everything will occur. A run on the banks and a run on the currency and thus a RUN ON THE CENTRAL BANK ITSELF! The big problem is this, the dollar is the lynchpin “reserve” currency for the entire world, what would it say if we had to move to negative rates …because NOTHING ELSE WORKED?
Of course, negative rates are a hypothetical at this point. I say “hypothetical” because the markets must be open in order to even try this “plan B”. You can now completely forget about technical levels for anything and everything as fundamentals are trumping everything. In case you do not understand what I am saying here, the fundamentals of “BROKE IS BROKE” will trump buying the dips, selling the rallies blah blah blah. We are at the point where “trust” is breaking down and “get me out” at any price is beginning to take over.
Much of the selling is being forced. As I wrote three or four weeks back, this is a margin call which is now self-propelled in motion. Sales to meet margin calls are further depressing asset prices and creating yet more calls in a reinforcing and now a continuous negative loop. As I mentioned above, “control” is being broken and with it the thought process “the government will never let it happen” is also being broken. As everything financial is “levered” or done with borrowed money, how much larger are the actual losses to “equity” and how much longer can it go until we see trading defaults? This I believe accounts for gold’s huge move today. Gold cannot “default” and default is exactly where the entire system is headed. You are now getting the answer to your question of where capital will flee once REAL FEAR begins because the levers don’t work anymore!
Let me finish with this, you are watching the system implode upon itself. At a time when liquidity on a global basis is very tight, a global margin call (created by the Fed) is being issued. They have started a process in motion that will not be stopped. The morning will soon come when markets simply cannot meet the call and will not open. At this point, credit of all sorts will freeze up. The stark reality that has been hidden for so long by so many “tricks” will finally hit the world square between the eyes like a 2×4! As we have tried to guide you for so long, the “day of reality” is arriving and the “reality” is truly ugly. Are you ready for reality?
Standing watch,
Bill Holter
Holter-Sinclair collaboration
Comments welcome! bholter@hotmail.com
This Is The NIRP "Doom Loop" That Threatens To Wipeout Banks And The Global Economy
Submitted by Tyler Durden on 02/12/2016 - 08:26 Beware, we are now spiraling headlong into a collapse thanks to a nightmarish NIRP "doom loop" from which the global cabal of central bankers' gone full-Krugman will not allow us to escape.
How €3.5 Trillion In NIRP Debt Made Europe's Credit Market "Most Vulnerable Since Lehman"
Submitted by Tyler Durden on 02/12/2016 - 12:30 In a note out Friday, BofA takes a fresh look at what the plunge down the NIRP rabbit hole has meant for the proliferation of negative-yielding assets in Europe. In addition to creating some €3.5 trillion in negative-yielding assets, successive rounds of easing have also had some rather disconcerting unintended consequences.
Here Is The ETF Liquidation That Sent Shockwaves Through The Crude Oil Market
Submitted by Tyler Durden on 02/12/2016 - 12:13 A week ago we exposed the real reason for the "crazy volatility" in crude oil markets, and specifically the driver of the immense rally (despite weak data) in crude - a massive liquidation of the triple-inverse ETF DWTI. Today we have another mysterious, even larger spike in crude oil prices (for no good reason other than 'old' misunderstood rumors about OPEC production cuts). The driver, it would appear, is another liquidation as the ETF trades at a huge discount to NAV. The last time this happened, it didn't last.
Here's What Julian Assange Thinks About Voting For Hillary Clinton
Submitted by Tyler Durden on 02/12/2016 - 11:54 "A vote today for Hillary Clinton is a vote for endless, stupid war...Clinton shouldn’t even “be let near a gun shop, let alone an army. And she certainly should not become president of the United States.”637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find "Quantitative Failure"
Submitted by Tyler Durden on 02/12/2016 - 11:30
The Best And Worst Performing Hedge Funds Of 2016 (And Those Inbetween)
Submitted by Tyler Durden on 02/12/2016 - 11:15
Oil Soars Most Since Feb 2009 On OPEC Production Cut Headline Redux
Submitted by Tyler Durden on 02/12/2016 - 11:08 Another day, another OPEC Production Cut rumor, and another massive swing in WTI Crude oil prices (+11.5% - biggest since Feb 09). But having run stops to these levels, we wonder what happens next?
Don't Show Bill Dudley This Chart
Submitted by Tyler Durden on 02/12/2016 - 10:59 The Fed's Bill Dudley just unleashed the most cognitively dissonant statement of his career. That superlative is highlighted by theses two headlines:DUDLEY SAYS U.S. ECONOMY IS IN QUITE GOOD SHAPE
DUDLEY: DON'T SEE NEGATIVE RATES HAVING 'BIG CONSEQUENCE'
Try telling The BoJ's Kuroda that!!
More Bad News For European Banks? ECB Leaks "Firm Support For A Deposit Rate Cut"
Submitted by Tyler Durden on 02/12/2016 - 10:27 After starting out strongly this morning, with DB stock trading just shy of $17/share, European banks have seen some weakness in the past 30 minutes following a report from Reuters, in which sources were cited as saying that there is "firm support for a deposit rate cut within the European Central Bank's Governing Council."
Americans' "Deflationary Mindset" Has Never Been Stronger
Submitted by Tyler Durden on 02/12/2016 - 10:20 Having already warned of a "deflationary mindset," today's University of Michigan Confidence data suggests Americans are falling deeper into dis-inflation territory. Today's headline tumble in confidence to 4-month lows, with "hope" dropping to 6-month lows is dominated by the plunge in 5-10 year inflation expectations to 2.4% (from 2.7%) - a 36-year record low.
Business Inventories Jump, Sales Tumble Sending Ratio To Recession-Warning Cycle Highs
Submitted by Tyler Durden on 02/12/2016 - 10:08 After some stabilization into mid-2015, the ratio of business inventories-to-sales has surged as sales have disappointed and mal-investment-driven dreams have over-stocked. Business inventories rose 0.1% MoM in December (retail up 0.4%) and sales tumbled 0.6%. At 1.39x, the current ratio is flashing a warning that a deep de-stocking recession looms.
Why NIRP (Negative Interest Rates) Will Fail Miserably
Submitted by Tyler Durden on 02/12/2016 - 09:51 What NIRP communicates is: this sucker's going down, so sell everything and hoard your cash and precious metals. If that's what the central banks want households and enterprises to do, NIRP will be a rip-roaring success.
The Curious Case Of The "Strong" January Retail Sales: It Was All In The Seasonal Adjustment
Submitted by Tyler Durden on 02/12/2016 - 09:30 Even a modestly deeper look below the strong retail sales headline numbers once again reveals just how this "across the board beat" was accomplished. It was all in the seasonal adjustment.
EU Ready To Restrict Passport-Free Travel, Austria To Close Border
"Each of the 26 countries in the open-travel Schengen Area is allowed to unilaterally put up border controls for a maximum of six months. That limit can be extended for up to two years if a member nation is found to be failing to protect its borders."
S&P 500 Approaching Significant Levels
The correction in the equity markets has brought the S&P 500 down close to a confluence of key technical levels.
I guess we’re beginning to see why gold rallied so sharply last Friday on the afterhours Globex. What we have here are the early stages of a global loss of confidence in the omnipotence of the central bankers planners. As confidence is the only “asset” backing their scheme, a growing loss of confidence is utterly devastating and this begins to lead the world back to the certainty of gold and silver.
Once again, events are moving very quickly so we’ll try to sum up as best we can…
The big action overnight was the continued collapse of the USDJPY. It fell rapidly through 113 and 112 before reaching a low of exactly 111.00. This was the maximum pain and embarrassment that the BoJ could bear and they reacted quickly, with an enormous intervention of nearly 2 full points:
Read More…
Jade Helm is back and it is back with a vengeance. Jade Helm 15 has morphed into Uuconventional Warfare Exercise 16 (UWEX 16).
UWEX 16 is strictly about fighting a civil war against rogue American troops who will, presumably, not go along with the imposition of tyranny under the banner of the UN flag with the complicit support of foreign troops.
In support of the anti-Guerrilla warfare/civil war scenario, the establishment will need massive amounts of detention facilities from which to place individuals and groups that are deemed to be a threat to the NWO. Any overt or covert support, either through material means, or through emotional support will land one in a FEMA camp. This article addresses the three phases of FEMA camp incarcerations. And when, not if, the roundups begin, you can count on them happening in three phases.
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by Michael Snyder, The Economic Collapse Blog:
Stock markets around the world continue to collapse as this new global financial crisis picks up more steam. In the U.S., the Dow lost 254 more points on Thursday, and it has now fallen for five days in a row. European stocks continued to get obliterated, and financial institutions are leading the way. But this week what is happening in Japan has been the most sobering. After falling 918 pointsthe other day, the Nikkei plunged another 760 points early on Friday. The Nikkei has now fallen for seven of the past eight days, and investors in Japan are in full panic mode. Overall, global stocks are well into bear market territory, and nearly 17 trillion dollars of global stock market wealth has already been wiped out.
Read More
Stock markets around the world continue to collapse as this new global financial crisis picks up more steam. In the U.S., the Dow lost 254 more points on Thursday, and it has now fallen for five days in a row. European stocks continued to get obliterated, and financial institutions are leading the way. But this week what is happening in Japan has been the most sobering. After falling 918 pointsthe other day, the Nikkei plunged another 760 points early on Friday. The Nikkei has now fallen for seven of the past eight days, and investors in Japan are in full panic mode. Overall, global stocks are well into bear market territory, and nearly 17 trillion dollars of global stock market wealth has already been wiped out.
Read More
from Truthstream Media:
Younger generations are being brainwashed that the only thing more dangerous than our Second Amendment is our First. They are being socially engineered to believe that it is literally a crime for anyone to offend them. They are being taught that they can run to a police officer and tattle like a bratty five year old if someone hurts their feelings and that the offender will actually suffer legitimate criminal prosecution for such a high crime.
The rest of us who haven’t been sucked into the progressive education system that promotes trigger warnings, make believe microaggressions, and magical “safe spaces”know this isn’t how reality works.
Read More
Younger generations are being brainwashed that the only thing more dangerous than our Second Amendment is our First. They are being socially engineered to believe that it is literally a crime for anyone to offend them. They are being taught that they can run to a police officer and tattle like a bratty five year old if someone hurts their feelings and that the offender will actually suffer legitimate criminal prosecution for such a high crime.
The rest of us who haven’t been sucked into the progressive education system that promotes trigger warnings, make believe microaggressions, and magical “safe spaces”know this isn’t how reality works.
Read More
from Washington’s Blog:
A Nobel prize winning economist, former chief economist and senior vice president of the World Bank, and chairman of the President’s council of economic advisers (Joseph Stiglitz) says that the International Monetary Fund and World Bank loan money to third world countries as a way to force them to open up their markets and resources for looting by the West.
Do central banks do something similar?
Economics professor Richard Werner – who created the concept of quantitative easing – has documented that central banks intentionally impoverish their host countries to justify economic and legal changes which allow looting by foreign interests.
Read More
A Nobel prize winning economist, former chief economist and senior vice president of the World Bank, and chairman of the President’s council of economic advisers (Joseph Stiglitz) says that the International Monetary Fund and World Bank loan money to third world countries as a way to force them to open up their markets and resources for looting by the West.
Do central banks do something similar?
Economics professor Richard Werner – who created the concept of quantitative easing – has documented that central banks intentionally impoverish their host countries to justify economic and legal changes which allow looting by foreign interests.
Read More
from CBC:
Canada is selling off most of its remaining gold reserves, mainly by selling gold coins, figures from the Bank of Canada and Finance Department show.
The country held just $19 million US worth of gold as of last Monday. Through most of 2015, the country’s gold reserves stood at more than $100 million US.
Finance Department figures show that Canada sold 41,106 ounces of gold coins in December and another 32,860 ounces of gold coins in January.
Read More
Canada is selling off most of its remaining gold reserves, mainly by selling gold coins, figures from the Bank of Canada and Finance Department show.
The country held just $19 million US worth of gold as of last Monday. Through most of 2015, the country’s gold reserves stood at more than $100 million US.
Finance Department figures show that Canada sold 41,106 ounces of gold coins in December and another 32,860 ounces of gold coins in January.
Read More
from Sputnik News:
According to US Secretary of State John Kerry, leaders have reached a ceasefire agreement that could be implemented within days.
Russian Foreign Minister Sergei Lavrov stressed that the main result of meeting in Munich was a confirmation of the UN resolution on Syria.
Lavrov also said that Russia expressed its concern that the Syrian opposition was harming efforts to resolve humanitarian efforts in Syria, which are worsening as the conflict drags on. Moscow called on the US and its allies to use their influence to convince opposition groups to cooperate with the United Nations.
Read More
According to US Secretary of State John Kerry, leaders have reached a ceasefire agreement that could be implemented within days.
Russian Foreign Minister Sergei Lavrov stressed that the main result of meeting in Munich was a confirmation of the UN resolution on Syria.
Lavrov also said that Russia expressed its concern that the Syrian opposition was harming efforts to resolve humanitarian efforts in Syria, which are worsening as the conflict drags on. Moscow called on the US and its allies to use their influence to convince opposition groups to cooperate with the United Nations.
Read More
from EU Observer:
German judges dealt a blow to EU-US free trade agreement talks after declaring a proposed arbitration court illegal.
The European Commission last September proposed setting up an investment tribunal court that would allow firms to challenge government decisions as part of its larger Transatlantic Trade and Investment Partnership (TTIP).
Critics says the new court, which is intended to replace a much loathed investor-to-state dispute settlement (ISDS) system, will pressure governments into clawing back consumer protection rights and environmental standards in favour of corporate interest.
Read More
German judges dealt a blow to EU-US free trade agreement talks after declaring a proposed arbitration court illegal.
The European Commission last September proposed setting up an investment tribunal court that would allow firms to challenge government decisions as part of its larger Transatlantic Trade and Investment Partnership (TTIP).
Critics says the new court, which is intended to replace a much loathed investor-to-state dispute settlement (ISDS) system, will pressure governments into clawing back consumer protection rights and environmental standards in favour of corporate interest.
Read More
from Wolf Street:
Schäuble tries to soothe nerves, but the plunge gets worse.
Shares of Deutsche Bank have plunged 57% since July 31, to a new 30-year low today of €13.71. Since the beginning of the year, they lost 38%. Credit Suisse plunged 8.3% today to CHF 13.01, down 53% since July 31. Other European banks got mauled too.
The Stoxx 600 Europe Banks index dropped to the lowest level since the gloomy days of the Eurozone debt crisis in 2012. At the time, Draghi’s whatever-it-takes pledge kicked off a bank rally. When it petered out, Draghi came up with negative deposit rates and QE, which in early 2015 kicked off another bank rally. But it all came unglued around July 31. Since that propitious date, the index has plunged 40%.
Read More
Schäuble tries to soothe nerves, but the plunge gets worse.
Shares of Deutsche Bank have plunged 57% since July 31, to a new 30-year low today of €13.71. Since the beginning of the year, they lost 38%. Credit Suisse plunged 8.3% today to CHF 13.01, down 53% since July 31. Other European banks got mauled too.
The Stoxx 600 Europe Banks index dropped to the lowest level since the gloomy days of the Eurozone debt crisis in 2012. At the time, Draghi’s whatever-it-takes pledge kicked off a bank rally. When it petered out, Draghi came up with negative deposit rates and QE, which in early 2015 kicked off another bank rally. But it all came unglued around July 31. Since that propitious date, the index has plunged 40%.
Read More
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